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Protecting Software in the Post-Alice World—Copyright as an Option
Posted in Copyright

The U.S. software industry continues to be an essential part of the national economy, often valued in the hundreds of billions of dollars. By all estimates, steady growth in the value and impact of the software industry will not slow down in 2018, aided by the continued evolution of software sectors and trends, such as augmented reality, artificial intelligence, machine learning, enterprise, cybersecurity, blockchain, and IoT, among others. It therefore remains essential that software development companies take all reasonable measures to protect their software.

Traditionally, software development companies have relied on intellectual property (IP) rights, including one or a combination of patents, copyrights, and trade secrets, to protect their software. Each of these IP rights provides different protection: a patent protects an innovative idea such as a method, algorithm, function, and/or system; a copyright protects the expressions of an idea; and a trade secret protects information that is not commonly known and is maintained secret by its owner. Usually, a patent is the most powerful and effective way to protect software. However, the 2014 decision by the Supreme Court in Alice Corp. v. CLS Bank Int’l [1] concerning the patentability of “abstract ideas” has been used to invalidate hundreds of software-related patents and has caused a reduction in the patenting success rates of various types of software-related inventions by the U.S. Patent and Trademark Office (USPTO). In light of the high cost of filing a patent application and the increased uncertainty of succeeding at obtaining a software patent caused by the Alice decision, it is important that software developers consider other ways of protecting their assets. Although trade secrets remain an option for protecting software, the discussion below focuses on the viability of using copyright in addition to, or as an alternative to, patent protection of software. 

Can copyrights be used to protect software?

Yes. It is well established that software can be protected by copyright law. Copyright protects against unauthorized copying of a copyrighted work, whether it be “literal” copying (e.g., verbatim copying) or “non-literal” copying (e.g., loose copying or paraphrasing) of all or portions of the work. As further detailed below, in the context of software, copyright protection extends to literal elements of the software, such as its source and object code, and non-literal elements, such as its structure, sequence, organization, and features generated by the registered code.

Is it necessary to register software to obtain copyright protection?

Copyright exists automatically in an original work of authorship once it is fixed in a tangible medium. Registering software is therefore not mandatory. Even without registering software, the author of an original work (i.e., the copyright owner) is entitled to exclusive rights including, among others, the right to reproduce the software, distribute copies, and authorize others to exercise the copyright owner’s rights. 

Despite the automatic existence of copyright in software, registration with the U.S. Copyright Office is recommended because it provides important benefits, including:

  • Creating a public record of the ownership of the copyright in the software.
  • Granting the owner the right to enforce the exclusive rights in the copyrighted software through litigation.
  • Establishing prima facie evidence of the validity of the copyright and the facts stated in the certificate of registration.
    • The application for registration of the software must be filed within five years after the first publication of the software.
  • Allowing the copyright owner to obtain statutory damages and attorneys’ fees for infringement of the copyright, which often far exceed the actual damages and profits that would otherwise be recoverable.
    • The software must be registered (1) prior to the infringement, or (2) within three months after the software is published.

Registration of the software with the U.S. Copyright Office can be used in connection with software licensing and acquisitions not only to show ownership of the copyrighted software, but also to demonstrate a licensor or target software development company’s diligence in protecting its IP.

What version of the software should be registered?

According to the U.S. Copyright Office, every version of a computer program that contains new copyrightable material is considered a separate work and must therefore be separately registered.  For some software development companies, it is reasonable to register each version of software that is released, as indicated by the Copyright Office.

For other developers, however, realities of today’s software industry requires the rapid release of programs, in some cases on a daily, weekly, or monthly basis to, e.g., deploy maintenance updates or additional features. This rapid release schedule sometimes makes it impractical for software development companies to register each version of a computer program. In such cases, a registration plan can be adopted to ensure that registration is diligent and practical. Examples of such approaches can include:

  • Registering software on a recurring time-based schedule (e.g., quarterly, annually).
  • Registering only major software release versions (e.g., version 1.0, version 2.0, etc.; not version 1.1, 1.1.1, etc.).
  • Registering software when its underlying code has sufficiently changed relative to the last registered version (e.g., 20% code change).

Of course, these approaches can be tailored for each computer program based on the pace at which it changes.

What variations of the software are protected by the registration?

As mentioned above, it is often impractical to register each version and variation of software. As a result, some registration strategies can cause one or more versions of software to not be registered. While it is a requirement that software be registered in order to sue for potential infringement, in some cases it is possible to rely on a registered version of software to support a case of infringement of an unregistered version. The unregistered version of software can be a pre-existing work (i.e., earlier in time) or a derivative work (i.e., later in time) relative to the registered version of the software. In either scenario, when determining whether to allow such a lawsuit courts often compare the registered work with the unregistered work and permit the infringement action only for those features and aspects of the software that exist in both the registered and unregistered versions. It is therefore important for development companies to register versions of software that include important features and aspects not found in other registered versions.

What elements of the software are protected by the registration?

Copyright protects literal and non-literal elements of the software against unauthorized copying, which can generally exist in the form of verbatim copying (i.e., literal copying) or substantially similar paraphrasing of the elements of the copyrighted work (i.e., non-literal copying). Thus, when software is registered, it is protected by copyright against much more than, for example, an exact replication of its code. In fact, copyright can protect a variety of elements of the software, including:

  • Source code and object code
    • Note: Registration of the source code is preferable because it can also support a claim of infringement of the object code and elements generated by the source code. The reverse is not necessarily true when only object code is registered.
  • Application program interfaces (APIs)
  • Graphical elements such as screen displays, interfaces, and discrete elements thereof
  • Commands and parameters
  • Structure, sequence, and organization of the software, including data input formats, file structures, design, organization, and flow of the code; flow and sequencing of screens

How is registration of the software performed?

Filing an application for registration of software for copyright is relatively straightforward, particularly when compared with patent applications. Registration requires paper or electronic submission of the following with the U.S. Copyright Office:

  • Completed application form
  • Deposit of first and last 25 pages of the source code of the software
    • Note: In cases where the start and end of the code is not identifiable, the applicant can submit any 50 pages of code deemed reasonably appropriate by the applicant.
    • Trade secret note: The submitted code can be redacted to block out portions of the code that are deemed by the applicant to be confidential
  • Fee: $55 for electronic filing

Processing of the application by the Copyright Office can take up to ten months. However, the application can be submitted for “special handling,” which accelerates the processing time to approximately five working days from the filing date for an additional $800 fee. Since registration of software is required to initiate a suit for copyright infringement, special handling can be used to expedite the time at which litigation can be initiated.

Takeaways and Conclusion

The above discussion demonstrates that copyright can and should be considered as a means for protecting software, particularly in light of today’s complex state of software patents. Thus, when determining the role of copyright in an IP portfolio, it is useful to keep in mind the following:

  • Copyright registration is relatively inexpensive and simple.
  • Copyright protects many elements of software, much more than just its source code.
  • Copyright protects against literal and non-literal copying of copyrighted software.
  • Copyright can be used together with other IP rights, such as patents and trade secrets, to create a robust IP portfolio. For example:
    • A patent application can be filed to protect a narrow or specific concept of a computer program that is likely to be deemed patent eligible by the USPTO, while a copyright can be registered to protect other aspects of the software that are likely to be considered patent ineligible.
    • An application for copyright registration can be filed with portions therein redacted to protect the software while retaining aspects or features thereof as confidential trade secrets.
  • Software should be diligently registered using a balanced approach that provides copyright protection for important elements of the software.
  • Source code for registered and unregistered software should be carefully maintained as evidence of ownership and, if needed, to support a claim of copyright infringement of the unregistered software based on a prior or later registration.

These and other factors should be carefully considered, reviewed, and discussed by applicants together with their IP attorneys.

[1] Alice Corp. Pty. V. CLS Bank Int’l, 134 S.Ct. 2347, 2354 (2014).

Maximizing the protection and value of intellectual property assets is often the cornerstone of a business's success and even survival. In this blog, Nutter's Intellectual Property attorneys provide news updates and practical tips in patent portfolio development, IP litigation, trademarks, copyrights, trade secrets and licensing.

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